ALBANY, N.Y. — Gov. Andrew Cuomo signed into law legislation allowing state-chartered credit unions to combine select employer groups, associational and community groups into a single field of membership at the same time, according to the New York Credit Union Association (NYCUA).
NYCUA, which worked closely with Cuomo's office, the Department of Financial Services (DFS) and lawmakers to help draft and advance the legislation, characterized the law as "historic."
Michael Lanotte, Association SVP and General Counsel at NYCUA, told Credit Union Journal that the signing of this bill carries historical significance in credit union advocacy efforts at the state level as the law marks the first time that standalone, pro-credit union legislation — beyond federal parity legislation — has been incorporated into the state credit union act.
"The law creates a field of membership provision that is more advantageous than the provisions found in the federal charter," he said. "As such, it gives state charters more flexibility in reaching those who need and deserve credit union services... We believe this new law will result in many federal credit unions revisiting and potentially converting to the state charter."
NYCUA noted, however, that under the new law, which will go into effect March 16, credit unions must still meet common-bond requirements, and it does not create any new affiliation or membership categories. The DFS will still be responsible for approving field of membership expansion requests.
"New York has a long banking history and is largely considered a bankers' stronghold," said NYCUA president/CEO William J. Mellin in a statement. "But this law shows significant progress, and it sends a strong message that New York supports and recognizes the economic and financial importance of state-chartered credit unions."
Mellin added that the law is a "testament to many years of hard work and the positive relationships built between the Association, the state's credit unions and our elected officials."
NYCUA explained that it advocated passage of the law as a way to provide the state's credit unions with a "viable, healthy, attractive and competitive alternative to the federal charter."
Last year, Cuomo actually vetoed an earlier version of the legislation, citing fears it would dilute the DFS' authority. But NYCUA indicated that the new version provided clarifications on the DFS' authority and also included language "empowering the DFS to determine additional permissible investments for state-chartered credit unions."
